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CERDI, Etudes et Documents, E 2007.

08

Document de travail de la série


Etudes et Documents
E 2007.08

Is the concept of sustainable tourism sustainable?


Developing the Sustainable Tourism Benchmarking Tool

Lucian Cernat*
UNCTAD and University of Manchester (IDPM)

and

Julien Gourdon
CERDI, Clermont-Ferrand

28 p.

*
The views expressed in this study are those of the author and do not necessarily reflect the views of
the United Nations or its Member States. The authors are grateful to David Diaz Benavides for his
support and insightful suggestions throughout the research period.
2

Abstract

Given the complexity of the issues surrounding the concept of sustainable tourism, the current
paper tries to provide a unified methodology to assess tourism sustainability, based on a number of
quantitative indicators. The proposed methodological framework (Sustainable Tourism Benchmarking
Tool – STBT) will provide a number of benchmarks against which the sustainability of tourism
activities in various countries can be assessed. A model development procedure is proposed:
identification of the dimensions (economic, socio-ecologic, infrastructure) and indicators, method of
scaling, chart representation and evaluation on three Asian countries. This application to three countries
show us that a similar level of tourism activity might induce different sort of improvements to
implement in the tourism activity and might have different consequences for the socio-ecological
environment. The heterogeneity of developing countries exposed in the STBT is useful to detect the
main problem of each country in their tourism activity.
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I Sustainable tourism – the need for a comprehensive


methodological framework
In recent years the list of international organizations, NGOs, and academics
tackling the concept of sustainable development has not ceased to increase.1 Such
efforts range from grand theories focused on producing a generally accepted, ‘one-
fits-all conceptual framework for sustainable development to more modest attempts
concentrated on specific issues or sectors. One such more specific area of research
concentrates on the concept of sustainable tourism. As with other sub-field of the
sustainable development literature, sustainable tourism is an area where the list of
existing analyses is long and impressive. In its 1999 annotated bibliography, the
World Tourism Organization (WTO) reviewed around 100 books and more than 250
articles on sustainable tourism. Despite these sustained research efforts, and
irrespective of the approach adopted, the merits and the usefulness of such analyses
are not fully clarified yet and their findings remain underutilized. Firstly, the concept
itself is far from being consistently used. The WTO defines sustainable tourism as
follows:
“Sustainable tourism development meets the needs of present
tourists and host regions while protecting and enhancing
opportunities for the future. It is envisaged as leading to management
of all resources in such a way that economic, social and aesthetic
needs can be fulfilled while maintaining cultural integrity, essential
ecological processes, biological diversity and life support systems."

However, the definition is sufficiently flexible to allow a variety of approaches


and interpretations of the concept. For instance, in the WTO annotated bibliography,
within the “sustainable tourism” catchphrase are included issues connected to rural
development, ecotourism, environmental impact, cultural and natural heritages, urban
development, alternative tourism, indigenous people, wildlife, natural parks, etc. This
diversity in views regarding sustainable tourism and the complexity of the concept has
led some tourism academics and practitioners to even question its utility (e.g.
Middleton and Hawkins, 1998).

Given the complexity of the issues surrounding the concept of sustainable


tourism, the current paper tries to provide a unified methodology to assess tourism
sustainability, based on a number of quantitative indicators. The proposed
methodological framework will provide a number of benchmarks against which the
sustainability of tourism activities in various countries can be assessed. The
methodology developed in this paper (Sustainable Tourism Benchmarking Tool -
STBT) relies on quantitative indicators that are policy-relevant and, as such, it is
hoped that it will become a useful tool for decision makers, researchers, and
businesses involved in tourism activities in developing countries.

1
Sustainability and sustainable development were given impetus and made popular by the World
Commission on Environment and Development (1987). Sustainable development was defined as
development that meets the needs of the present without compromising the ability of future generations
to meet their own needs”. Both an equity dimension (intra-generational and inter-generational) and a
social/psychological dimension are clearly outlined by this definition.
4

The remainder of the paper is organized as follows: the next section briefly
reviews some of the relevant literature on indicators for sustainable tourism. The third
section makes succinctly the case for a sustainable tourism benchmarking tool. The
fourth section describes at length de methodology used to construct the STBT. The
fifth section exemplifies its usefulness using three case studies. The concluding
section summarizes the main findings obtained based on the use of STBT and
provides some policy recommendations.

1. Sustainable tourism indicators – what do we have so far?


Most studies assessing tourism activities deal often with one component of tourism.
For instance, the economic impact of tourism activities is usually estimate based on
data on number of arrivals, receipt per tourist, average length of stay and other
economic indicators. In order to correctly estimate tourism activity and tourism’s
impact in national economies, some studies are specialized on tourism account
methodology (Frechtling, 1999). Other studies have been interested in assessing the
use tourism resources (natural, cultural, etc). However, a growing literature deals with
the sustainability assessment, trying to develop indicators and to provide
methodologies for sustainable tourism. For instance, Miller (2000) focuses on the
development of indicators measuring tourism sustainability. Unlike many studies that
cover only physical and human environment, Miller (2000) presents several indicators
covering all aspects of the sustainability: environmental issue (physical and human),
employment, financial leakages and customer’s aspects (satisfaction and role).
Another notable attempt to create a comprehensive methodology to assess sustainable
tourism is found in Ko (2004). After a review of the existing literature, he argues that
“methods of systemic sustainability assessment are not currently used in tourism” (Ko
2004:4). He finds that most studies on sustainable tourism development are
descriptive, based on qualitative data and subjective in their conclusions, thus lacking
a rigorous methodology to assess sustainability issues in the tourism sector. After
identifying this gap in the literature, he develops a conceptual framework for tourism
sustainability assessment based on 8 dimensions: political, economic, socio-cultural,
production-related aspects, environmental impact, ecosystem quality, biodiversity and
environmental policies. Each dimension is assessed on the basis of several
quantitative and qualitative indicators which are scaled and clustered in order to
assess the sustainability of a tourist destination.

The current analysis departs in a number of respects from the methodology outlined in
Ko (2004). Firstly, Ko (2004) argues that the issues and concerns related to
sustainable tourism vary from one tourism destination to another. Hence, he suggests
that dimensions, indicators and data gathering methods could vary from one tourist
destination to another, in order to adapt the methodology to the specific conditions of
each tourist destination. While this methodology has its merits, it limits the ability to
compare results across tourist destinations. To address this gap, our methodology is
intended to create sustainable tourism benchmarks based on a consistent methodology
that allows comparability of results across tourist destinations. Secondly, Ko (2004)
works with hypothetical data to give an illustration of his methodology. In the current
paper, the STBT is tested using real data from three case studies. This allows us to
show the usefulness of such approach in identifying policy relevant indicators and
making policy recommendations to increase the sustainability of the tourism sector in
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developing countries. Thirdly, unlike previous studies, our methodology covers a


wide rage of tourism-related aspects: economic sustainability (tourism assets, tourism
activity, linkages and leakage effects), the role of overall infrastructure, and
environmental and social sustainability.

Our methodology has also several limitations. The STBT does not account for quality
considerations, nor does it include at this stage qualitative data (perception surveys,
questionnaires, etc.). Also, another specificity of our approach is that the economic
sustainability is broken down into several dimensions whereas the environmental and
social aspects are bundled together in socio-ecological sustainability. However, the
fact that each detailed indicator has its own score allows the users of the STBT to
combine or separate the various sustainability dimensions in different ways.

2. Why do we need a methodology?


The main reason for a comprehensive methodology aimed at improving the prospects
for sustainable tourism in developing countries stems from the growing importance of
tourism activity in developing countries. Tourism has emerged as one of the world’s
major socio-economic sectors, and has been steadily expanding at an average rate of
about 4-5 per cent annually during the latter half of the 20th century. The combination
of domestic and international tourism is now acknowledged as comprising the world’s
‘largest industry’. In 1995, tourism globally generated an estimated US$3.4 trillion in
gross output, contributing 10.9 percent of the world’s gross domestic product (GDP),
creating employment for about 212 million people and producing US$637 billion in
government tax revenues.

Developing countries are receiving an increasing share of international tourists as they


improve transportation access, develop tourist attractions, facilities and services and
become known as desirable tourist destinations. Their share in the international
tourists arrivals2 grew up from 28% in 1990 to 31% in 1997. Moreover for developing
countries, this tourism activity constitutes a large fraction of total export receipts and
the share in GDP can rise above 40 percent (in some Caribbean countries). The
arguments that suggest that primary products will enjoy a decreasing share of world
income apply in reverse as increasing incomes and more leisure time raise tourist
expenditures proportionally more than income. Moreover, even though the tourism
sector has been severely hit by a number of crises (international terrorism, SARS,
natural disasters), estimation of standard deviation of growth rates of ‘export value’
for several primary commodities and tourism show tourism revenue is less volatile
than this commodity’s revenues (Maloney and Montes Rojas, 2001). Finally, tourism
activities bring much-needed foreign exchange by developing countries to finance the
import of capital goods and raw materials required to the economic development and
diversification of their economies.

Despite such considerable potential, some economies have not been able to take
advantage of the growth in tourism activity. For example, tourist expenditures in Latin

2
The term ‘tourists arrivals’ refers to total international tourist trips made, not to the number of
different tourists travelling. Some persons take more than one international trip per year.
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America have risen only of .51%3 annually for the last 20 years, the region has
dramatically lost market shares, and the apparent expenditure per visitor appears to be
declining over time. Huge sustainability problems are appearing in some countries.
Often in island, like Tahiti or Caribbean, where human presence creates pressures on
sea food, and where local communities do not benefit of this activity but moreover
have lodging problems because of the increase of lodgment cost with infrastructures
for tourists. On average, 60 to 90 percent of the price that tourists pay for their
holidays goes to the multinationals companies that own the airlines and runs the
hotels.

This gap between realities and potential in sustainable tourism needs a methodology
that could cover the complex issues described above. Moreover such methodology
would need to develop some benchmarks in order to allow developing countries that
are dependent on the tourism to improve the sustainability of the sector.

II Sustainable Tourism Benchmarking Tool (STBT)


The objective of the STBT is twofold. Firstly, such a methodology should be able to
detect the sustainability problems in a tourism destination. Secondly, using
benchmarks and policy-relevant indicators, the methodology should enable policy
makers to take informed decisions and improve the prospects for sustainable tourism
development in their countries.

To construct the STBT the following steps have been followed. Firstly, seven key
dimensions have been singled out:
• tourism assets
• international tourism activity
• tourism-related linkages
• tourism-related leakages
• environmental and social sustainability
• overall infrastructure
• other attractive aspects (cheap price, human resources, risk;..)

Secondly, once the dimensions clarified, the next step is to find appropriate indicators
that could capture the essential aspects of each dimension. Thirdly, the indicators are
scaled to allow cross-country comparisons. Fourthly, the indicators are placed on a
conceptual chart that frames the specific issues that the STBT can address.

3
Maloney and Montes Rojas (2001)
7

1. Dimensions
1.1. Economic sustainability

Tourism asset

It goes without saying that each country that is considering developing its tourism
sector should carefully evaluate it tourism–related assets and resources. Tourism
assets are essentially the main factors that motivate tourists in choosing a particular
destination. Tourism assets need therefore to be carefully evaluated before deciding
whether a particular area has potential for developing or expanding tourism, and if so,
what type of tourism activities is the most appropriate to develop. In the literature, the
relatively few studies concerned with the evaluation of tourism assets highlight the
difficulties in interpreting various quantitative tourism asset indicators. The “Guide
for local authorities on developing sustainable tourism” (WTO 1998) provides a good
description of the type of tourism resources that need to be considered and assessed.
The Tourism Satellite Account, for instance, also analyses thoroughly the supply side
of tourism but that concerns only the producer of goods and services in tourism
activity. In our methodology tourism assets are grouped into two categories: natural
resources and cultural assets.

International Tourism activity: Tourists frequenting and spending

While existing tourism assets give an indication of the potential for tourism
development, it is also important to know how the country exploits these tourism
assets for international tourism. Therefore, a second dimension in our methodology
measure tourism activity. There are several aspects that could be included in
international tourism activity. One are of interest is the number of tourist and the
revenue from tourism. Another important aspect of tourism activities is to assess the
dynamism and the long-term potential.

Linkages: Tourism revenue for the all economy

On of the best ways to enhance economic benefits is to integrate tourism into the
national economy by establishing strong linkages between tourism and other
economic sector including agriculture, fisheries, manufacturing, construction. If the
tourism sector makes use of products and services produced within the economy the
tourism will strengthen those sectors and provide additional income. The extent of
integration of tourism in the national economy is captured by the multiplier effect.

Leakages: missed opportunities

When linkages with the other sectors of the domestic economy cannot be built, a
significant part of the development potential stemming from tourism activities is lost.
Leakages are broadly defined as the loss of foreign exchange and other hidden costs
deriving from tourism related activities. Not all leakages are unnecessary, as some
costs cover crucial input to the tourism sector not available in the local economy.
Leakages include two main components that we must account to obtain a reliable
approach of leakages effects. Internal leakages are losses due to tourism activities that
originate in the economic space of the tourism service provider and are paid an
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accounted for domestically. It most generally refers to the “import coefficient” of


tourism, or the proportion of imported goods needed to provide the service. External
leakages are opportunity costs that originate outside the economic space of the
tourism service provider and are not accounted for domestically, which make them
more difficult to measure.

In order to appropriately define a tourism development strategy for any developing


countries, leakages indicators must be elaborated and policy options must be
evaluated in the light of these factors.

1.2. Socio-ecological sustainability

Another aspect included in our methodology is the extent to which tourism activities
benefit the community and the environment. The social dimension quantifies the
involvement of local communities in various tourism activities. The environmental
aspect included in our methodology assesses the implementation of environmental
and quality standards agreed by relevant international organizations for tourism
projects and allocation of tourism revenues to prevent degradation of the destination
resources.
The two components of this dimension are clearly connected with the linkages and
leakages issue. The issues need to be analysed jointly. For instance, even though a
tourist activity may have low leakage effects, this does not necessarily mean that the
community will benefit of this activity if the local operators do not create sufficient
jobs for the community or if wages are very low. Moreover, the socio-ecological
sustainability will not be assured if this activity is not properly taxed to provide
resources for environment protection.

1.3. Infrastructure sustainability

Infrastructure may well be considered as a tourism asset. However, given its general
nature, we prefer to treat this field separately of the specific tourism assets that are
natural and cultural resources. Furthermore, unlike natural and cultural resources,
infrastructure is depends much more on various other policies, and hence its high
policy relevance further justifies its separate treatment. General infrastructure assets
are key to sustainable tourism development since the accessibility to specific tourism
assets depend on the quality of the overall infrastructure.

1.4. Attractiveness

Price competitiveness is usually regarded as one of the most important factors of


competitiveness for a given destination so this could explain differences in economic
activity between counties. Attractiveness could also depend on the degree of
qualification of the population in several tasks and on safety in the country.
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2. Indicators
The next phase in the construction of the STBT is the operationalization of these
dimensions briefly outlined above. Each dimension is therefore broken into groups of
variables. These variables are also broken into key indicators with several indicators
(see Annex Table 1). Such indicators are constructed and compiled from different sort
of statistic indicators: tourism assets (natural and cultural), tourism activity
(frequenting and spending by characteristics of tourists), linkages with other sectors of
the economy (that necessitate access to input-output matrix), tourism-related leakages
(that necessitate input-output matrix and data on origin of tourism operators), and
indicators for tourism-related infrastructure.

2.1 Tourism assets indicators

As previously mentioned, one major tourism asset is comprised of activities related to


the natural environment. Such assets can provide opportunities for beach and marine
tourism, hiking, snow skiing or mountaineering, ecotourism, wildlife viewing,
controlled fishing and hunting. The methodology contains quantitative indicators for
such natural tourism assets, selected based on data availability. We use the distance of
coast line weighted by the distance to equator4 , the number of scarce animal and
vegetal species, the surface of forest and the number of national parks. The second
type of tourism assets that has been accounted for in the STBT refers to cultural
assets. Such assets are related to cultural heritage, museums, archaeological sites,
architecture or crafts, major cultural and sports events, etc. In order to construct an
indicator which aggregates all those aspects, we have to weight all these assets by
their potential attractiveness for tourism; however we have not yet deal with this
problem.
The choice of tourism assets indicators is subject to interpretation. Several other
variables and indicators could have been included. For instance, in its guidelines,
WTO includes a number of other aspects in tourism assets: climate, environment
quality, human resources development (qualification of employees), infrastructure
(roads, rail, etc), tourism facilities (accommodation, restaurants, etc.) and evening
entertainment (cinema, casino, etc). However, climate, environment, quality and
infrastructure, more often than not, are not major determinants of tourism demands
and, as mentioned before, in the context of this paper, tourism assets are considered
the main determinants of tourism demand. Therefore these aspects have been
accounted in the tourism-related infrastructure.

2.2 Tourism activity indicators

The main tourism activity indicators are number of tourist and the receipt from
tourism. Such indicators should be further disaggregated by the sort of travel, trip and
transport, country of origin and the purpose of visit. Such detailed statistics could
shed some light on a number of specific characteristics of tourism, such as the extent
to which a tourism destination is engaged in high value tourism. Depending on the
specific characteristics of a tourism destination, the tourism activity indicators could

4
Since a coast line in Canada does not offer the same adavantage as a coast line in Indonesia.
10

also suggest ways in which the average expenditure per trip could be improved (e.g.
raising the length of stay or the expenditure per day). We distinguish the “Flow”
indicators, that are number of tourists arrivals and tourists receipt, from “Quality”
indicators, that are the average length of stay and the receipt per tourist per day. We
add indexes to measure the dynamism in international tourism, which are the part of
international tourism revenue on national tourism revenue, the receipt from
international tourism on exports and the openness index from WTCC5.

2.3 Linkages indicators

Given the complexity of tourism activities, it is rather difficult to statistically


distinguish tourism from other economic activities and to measure its contribution to
the overall economy. WTO has played an instrumental role in improving the way in
which tourism activity is statistically identified and measured. Despite that,
difficulties remain in measuring linkages of tourism activity. A large part of the
problem centers on the traditional method of defining an industry, which is from a
supply or production perspective. The products they produce can readily identify
industries such as agriculture or manufacturing, but most tourism-related businesses
do not devote all of their production to tourism. Restaurants and retail stores rely on
sales revenue generated by both visitors and non-visitors.

Setting up a tourism satellite account that disaggregates tourism as a sector in the


national economic accounts, as has been recommended by the WTO, is an important
technique to analyze the true economic contribution of tourism and input-output
analysis will determine the extent to which tourism is linked to other sectors. One of
the best tools for this analysis is to use input-output analysis. This kind of analyses
helps to demonstrate how economic sectors are related, the number of linkages among
them and the effect of these linkages. Input-output analysis is a mean of analysing
inter-industry relationships by tracking the flow of goods and services across different
sectors. That is why we include the use the amount of indirect effect on other sectors.
In comparing this amount to the tourist expenditure we find an indicator next to the
multiplier effect.

The recent report from Satellite Account allows us to distinguish between a tourism
industry6 which satisfy visitor consumption and a tourism economy created by the
tourism industry.
The tourism industry linkage index measures the indirect effect of tourism industry
(e.g. tourism industry demand to other sectors). It is the indirect Gross Domestic
Product associated with travel and tourism consumption. This is the upstream resident
economy contribution which comes about from suppliers to the traditional travel and
tourism industry. Establishments in this category include fuel and catering companies,
laundry services, accounting firms, etc.

5
Openness Index shows the level of a country's openness towards international trade and international
visitors. The Openness Index is an aggregate index combining the Visa Index, Tourism Openness
Index, Trade Openness Index and Taxes on International Trade Index
6
Direct Gross Domestic Product associated with Travel & Tourism Consumption. Establishments in
this category include traditional Travel & Tourism providers such as airlines, hotels, car rental
companies, etc.
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The tourism economy linkage index measures the effect on GDP of the development
of tourism industry. This is the broadest measure of travel and tourism's contribution
to the resident economy. Establishments in this category include manufacturing,
construction, government, etc that are associated with capital investment, government
services and non-visitor exports.

2.4 Leakages indicators

As in the case of linkage effects, measuring economic leakages necessitates either


satellite accounts or using input-output tables. The literature distinguishes two types
of leakage effects: internal and external leakages. In principle import related internal
leakages are highest where the local economies are poorly equipped to provide
adequate inputs, in terms of quality of produced goods and services, to the tourism
sector. Some studies have provided an interesting differentiation between competing
imports and non-competing imports (UNESCAP, Malaysia, 1991). This allows for the
differentiation of imports according to their unavailability or to factors relating to
quality or tastes. Using input-output tables would allow us to calculate several
indicators. Firstly, the leakage effects can be assessed using the net balance of foreign
exchange (which is difference between earnings from tourist expenditure and the
input imports for tourism) or the net foreign exchange earnings ratio for tourism.
Secondly, another useful indicator is the import multiplier, which measures the
amount of imported inputs required for every unit of output consumed by tourists. As
we have get distinction between tourism industry and tourism economy we can
provide several index, one measured the part of import required by tourism industry,
the other measure the part of import required by linkage to the economy, the last
measure overall imports on overall tourism consumption.

However internal linkages are not only limited to imports, they also contain a
financial component resulting from remunerations to foreign capital and labour that
supplement the usually scarce local endowment. These remunerations result in the
repatriation of salaries and interest paid of earning monies in the local tourism sector.
To account for these leakages, Perez de Cuello (2001) proposes the following
indicator:
F = (W + I + D ) R
F: Financial outflows
W: Foreign Employee remuneration repatriation
I: Interest paid to the rest of the world
D: Dividends repatriation
R: Tourism Income
For consistency with other indicators we will use a modified version of this indicator:
F = (W + I ) R
Since as Gollub and al. (2001) we consider dividends repatriation as external leakages
since they are directly relied to the foreign share and capital participation on tourism.

External leakages occur for instance when revenues are retained by external tour
operator, booking intermediaries, foreign airlines, cruise ships or other forms of
foreign-owned transportation. The loss of potential income due to sales contracted by
agents abroad, of which only a margin is paid to the domestic tourism service
providers is a cost that detracts from the positive effect tourism can have on the
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economy. We could measure that by the percentage of prearranged tourism booking


prices received by local tour operators (Perez Ducy de Cuello, 2001).
The second effect is when leakages accrue to foreign investors financing developing
country tourism infrastructure and facilities, through repatriated profits earnings and
profits. Those leakages are often unavoidable and necessary in the near term in order
to access sufficient sources of development finance. Those leakages are due to foreign
direct investment in tourism activity. Concerning the profit, we just consider the
repatriated profits as reinvested profits are goods for the national economic activity.
F = (D + P ) R
P: repatriated profits

2.5 Socio-ecological sustainability indicators

One broad indicator with relevance for socio-ecological sustainability is the number
of tourists relatively to the local population.7 For social sustainability, the set of
indicators should capture the major benefit for local communities. Two useful
indicators in this regard are the number of created employment relative to tourism
revenues and the average wage in tourism relative to the average wage in the
economy. The employment effects that we take in account are direct employment in
tourism sector and indirect employment, in other sectors. The second indicator
assesses the extent to which tourism represents a high-value activity.8

Another benefit for the community that needs to be taken into account is tax revenues.
Tourism-related taxes can offer an important economic benefit to an area. These taxes
can provide the financial resources for development of infrastructure, public facilities
and services that can improve the living standards of local communities. However,
there is concern that undue or high levels of taxation will be a deterrent to developing
tourism on an internationally competitive basis. Tourism-related taxes that are
discriminatory or inequitable may distort the competitive position of the destination
leading to decreasing tourist markets.

Direct impacts of tourism activity on environment are difficult to estimate at a


national level. However, several broad aspects can be incorporated in our framework.
First, the actual environmental quality needs to be quantified, using several indicators
such as the percentage of endangered species, CO2 emissions per capita. Secondly, the
regulatory framework is another important element for the preservation of
environmental quality. For this, the number of environmental-related international
agreement signed by a country may be a good indicator of the commitment for
environmental protection. Lastly, the impact of tourism activity on environment needs
to be assessed. One simple way to quantify this is to use the tourism density (the
number of tourists per square km for instance). This requires weighting the number of
arrivals during a certain period (e.g. a month) by the length of stay.

7
The indicator should be calculated as the average number of tourist present at one time, and not the
overall arrivals. That necessitates weighting the number of arrivals during a month by the length of
stay.
8
Several studies for developing countries often suggest comparable wages in tourism and non-tourism
sectors. However, the official wage statistics usually do not include tips, which may increase the
relative wage in the tourism sector.
13

One could of course refine this analysis and, based on data availability, include
additional indicators or dimensions of environmental impact. For instance, the
existence of environment review procedures for infrastructure management and sites
development could also supplement the information about regulatory framework. The
number of protected area or the tourism-related tax revenues devoted to environment
protection activity are also good indicators of environmental sustainability.

2.6 Infrastructure indicators

The development of travel services in developing countries obviously depends on the


quality of overall and tourism-related infrastructure. Overall infrastructure indicators
refer to transport infrastructure, electricity production, sanitary and water access. The
ICT infrastructure has become an important element in the tourists’ choice, as a result
of a need for rapid communication. This aspect is captured by several classical
indicators, such as number of phone lines, mobile phone penetration, and Internet
hosts. Tourism-related infrastructure comprises accommodations, restaurants and
other tourist facilities. Entertainment infrastructures (such as cinema) are also an
important elements, although not necessarily for all types of tourism (ecotourism, for
instance). All this indicators are ratio report to the surface for transport infrastructure
or to people.

2.7 Attractiveness

This last field completes the endowment for tourism with infrastructure and asset
fields. We construct it in choosing several aspects used in WTTC study on
competitiveness. We select the index on price competitiveness (that mix hotel price
index and purchasing power parity index), the index on human resources (mainly
based on education index) and we add ICRG and Civil Liberties.

2.8 Scaling

Lee-Smith (1997) point out that in assessing sustainability, ordinal or interval scales
are normally used, Prescott-Allen’s Barometer of Sustainability uses an interval scale
of 1-100 (Prescott and Alllen, 1997). The ordinal scale (bad-poor-medium-good) is
useful especially where there is a lack of consensus as to what would constitute an
adequate standard. However, as Ko(2004) ague, the degree of openness towards
sustainability is unlikely to be recognized without any standards in the numerical
sources. Even if the country should move from one qualitative category to another, it
is difficult to clearly appreciate the extent to which a tourist destination is getting
better or worse without numerical graduation. Here we choose to use an interval scale
based on numerical scores.
The indicators included in the STBT range from 1 to 100. Since numerical standards
are absents in the literature on sustainability, the score for each country is graduated
relatively to the score of other countries. Therefore the scores are graduated in using a
world medium standard.
These values are obtained through a 'normalization' technique, where each indicator
has been assigned minimum and maximum values. Through a simple arithmetic
14

average, the relevant normalized indicators are aggregated to give the value for each
variable, and the relevant variables are aggregated to provide the value for each area.
Concerning all indicators, a high value means always a good performance in the area.
The condition to have a relevant assess is to include enough country to be closed to
the real rank of each country relatively to the present trend. We apply as in
Gooroochurn and Sugiyarto (2005) the following formula:

Actual value - Minimum value


Normalisation =
Maximum value - Minimum value

We apply this normalization for all the indicators (40) we use in this study, and we
use it also for the composite themes indices: variables and dimensions (see Annex 1).
Effectively, each composite theme index is the product of several indicators, and we
normalize this value to scale it from 0 to 100.

3 The STBT chart: framing the issues


The STBT framework is based on several dimensions (assets, activity, linkages,
leakages, sustainability, and infrastructure) and the complex interaction among them
(see arrows A-F). Such a framework will allow not only create a descriptive map the
score of the country on each dimension (assets, linkages, etc.), but will also allow a
comparison of different countries in different areas. Moreover, the framework allows
us to address specific tourism-related issues in developing countries by analyzing
various linkages between specific areas.
15

Chart

F
Asset
E A
100

Attractivness Activity

D
0
Infrastructure Sustainable B

Leakages Linkages
C

Figure 1. The STBT: the conceptual structure

The following paragraphs describe the main issues that can be addressed using the
STBT:

A: Assets-Activity: Is the country able to increase the tourism value?


This issue is related to the ability for a country to exploit its tourism asset. If the
indicators for tourism activity show lower values than the ones for tourism assets, this
could indicate that the country does not attract sufficient tourists or that expenditure
per tourist is low.

B: Activity - Linkages: How are linkages with the all economy?


This issue is related to the capacity of the tourism sector to contribute to the activity
of other sectors in the economy. It could indicate if the action needs to be taken to
promote increased positive spill-over effects to other domestic economic sectors.

C: Linkages-Leakages: Could the tourism be more beneficial to the local economy?


In many developing countries there is a need to detect the leakages in the tourism
activity, which are generated by tour operators, hotels owners, other foreign economic
actors, imported goods, etc.

D: Activity-Sustainability: Are tourism activities sustainable?


As mentioned above, this issue is related to the social and environmental capacity to
develop tourism activity. For the environmental issue there are two aspects: the
current state of the environment and the environmental impact of tourism activity.
16

The social aspect captures the impact of tourism activity on employment, job quality,
and tax revenues for local communities.

E: Activity-Infrastructure: Is the infrastructure sufficiently developed to support


tourism development?
This issue is related to the ability of existing infrastructure to respond to tourism
demand. It concerns tourism-related infrastructures (hotels, restaurants, etc.), transport
and communication infrastructures, as well as other basic infrastructures.

F: Activity-Attractiveness: Is the country sufficiently attractive to enhance tourism


development?
This issue is related to the explanation of tourism activity score regarding to the
attractiveness in the country.

The applied STBT methodology can be best presented as a multidimensional graph


(see figure 2 in Annex). All indicators have been scaled from 0 to 100, with maximum
values being desirable from a policy perspective9. Because of data constraints, we
could not include all the indicators presented above in our methodology, especially
those concerning the financial leakages field. The indicators used are presented in the
Annex 1 by a bold slash. The STBT allows us to analyse the issues raised above.
We briefly see that Vietnam appears to have weak international tourism activity
compared to the asset. It is maybe due to the lack of infrastructure. In contrast
Dominican Republic and Egypt seems to relatively well exploit their asset for
tourism. Vietnam presents a tourism activity that generates a great part of output for
the other sectors, but it creates also a lot of imports. Once we did these global
comments, we have to see more precisely the indicators that composed each field
composite index. We apply this process in the part IV for case study on three Asian
countries.

III A Global approach

Here we can firstly adopt our method to provide a global analysis on the main
characteristics for a country subject to high linkages or weak leakages in the tourism
activity. We use a cluster analysis which aims to grouping countries based on the
indicators (leakages or linkages), such that the groups exhibit high internal (within
clusters) homogeneity and high external (between clusters) heterogeneity for those
indicators.
Then we obtain four clusters grouping by their linkage level and four clusters
grouping by their leakages level. So we can now study for each group their
characteristics in terms of asset (sorts of asset), activity, infrastructure, sustainability
and attractiveness to detect if one of this field seems correlate to the indicator level.

9
Therefore a high score in the leakage field means that the country has few leakages relatively to the
tourism activity.
17

To obtain consistent clusters we need several countries, so we limit the number of


indicators to get 75 countries in our sample, the indicators retained are in appendix 1
with a slash.

The results for the linkages clusters are given in table 1.1, they offer several
interesting conclusions. First it does not seem that linkages were correlated to a
specific sort of asset for tourism. Secondly, in this clusters presentation, it does not
exist a clear relation between leakages and linkages (as we have measured them).
Thirdly it seems that the more the international tourism activity is the less is the part
of tourism industry which benefit to the other sectors.
The results for the leakages clusters are given in table 1.2. Here we show a clearest
relationship between linkages and leakages since it seems that the countries which
have the weakest indicators for leakages have the highest indicators for linkages. So a
tourism activity which creates output for the all economy will also increase imports in
the economy. Finally, it seems that countries that have a high indicator for
international tourism activity have few leakages but also few linkages.
The main conclusion here is that an increase in international tourism activity is
correlated with fewer leakages but also fewer linkages, not in absolute terms but in
relative terms of course. The tourism sectors manage to become less dependent from
other sectors and from other countries.

However the main use of the composite theme indices is to help us in country
analysis, in comparing situation for each country on each theme relatively to the
other.

IV Country Case study


We test our STBT methodology on three developing countries from Asia: Indonesia,
Malaysia and Thailand.

Assets-Activity issues

Indonesia has the highest score for tourist assets, whereas Malaysia and Thailand rank
far below (1st dimension in the STBT chart). However, despite lower scores for tourist
assets, the scores for tourism activity are very close for all three countries (2nd
dimension). The STBT suggests that Malaysia and Thailand appear to be more
efficient in the exploitation of their assets than Indonesia. A closer look at each of the
indicators that were aggregated in each dimension reveals other important findings
(Annex Table 2). For instance, Malaysia is ranked first with regard to the number of
tourists attracted. However Malaysia has a relatively low level of expenditure per
tourist. In contrast, Thailand seems to be oriented towards high value tourism. Both
Malaysia and Thailand have a low score on the length of stay of tourists. Finally,
Indonesia does not have good score on the number of tourists but has a good score on
the revenue per tourist, not necessarily due to high value tourism but due to a longer
length of stay of tourists. These indicators suggest that Thailand needs to raise the
expenditure per tourist not only in raising length of stay but maybe in developing
attractions that attract special interest tourists to attain a more high value tourism.
Similarly, the STBT framework suggests that Malaysia needs take actions aimed at
raising the length of stay of tourists, by providing for instance new attractions or
18

special events as part of tourist packages. On the other hand, Indonesia would need to
improve its score on the number of tourists, by using more actively for instance, new
marketing ways such as the internet.

Asset
100

Attractivness Activity

Indonesia
0 Malaysia
Thailand
Infrastructure Linkage

Sustainability Leakage

Figure 3. The STBT chart

Activity - Linkages: How are linkages with the all economy?

The STBT framework suggests that tourism in Indonesia and Thailand creates fewer
linkages in the economy relatively to the amount of expenses by tourists. This is in
contrast to the Malaysian case, where the biggest score for linkages is recorded (3rd
dimension). A more detailed analysis could indicate which sectors need to be
encouraged to expand or create new products. Establishing stronger inter-sector
linkages will typically require special analysis and specific programmes. When the
potential linkages are identified, specific programmes to strengthen linkages can be
formulated and applied. For example, certain food items of interest to the tourism
sector may exist in the country but production may need to be expanded and a steady
source of supply ensured, transportation from the production area to the tourism
enterprises improved and marketing mechanisms adopted. Some types of food items
may need to be improved or modified before they are acceptable for use by tourism
enterprises. Farmers may require technical and financial assistance to improve and
expand their production. For manufactured items, incentives may need to be provided
to the manufacturers to produce the items needed and standards adopted to ensure that
the items are suitable for use in tourism. Craft production may require better
organization, quality standards applied and marketing facilities.
19

Linkages-Leakages: Could the tourism be more beneficial to the local economy?

The STBT framework pointed out some interesting cross-country comparisons with
regard to linkages and leakages generated by the tourism sector. Malaysia, which had
the best score for linkages (3rd dimension), has the worst score for leakages (4th
dimension). This apparent paradox may be explained by the fact that a large part of
the tourism-related activities generated in other sectors needs to import most of their
input to supply the required products by the tourism sector. On the contrary, tourism
in Indonesia provides “relatively” less linkages (3rd dimension) but this activity is
conducive to a large extent to linkages with the local economy (4th dimension).
Several policy recommendations to contain leakages could be advanced. To reduce
leakages generated by imports of goods and services, developing countries need to
encourage investment by local entrepreneurs to improve their existing products and to
diversify into new products. To reduce internal financial leakages, the country can
impose a limitation of foreign capital for some tourism-related projects and activities
where financial leakages are important. Similarly, leakages generated by foreign
higher management personnel could be reduced if such skills exist in the country.
Policies should provide incentives to reinvest profits that otherwise would be invested
abroad.

Activity-Sustainability: Are tourism activities sustainable?

With regard to tourism sustainability, Thailand and Malaysia present the most
problematic situation, the former on the human component, and the latter in the
environmental component. The good score for Indonesia in the sustainability segment
confirms that an increase in the number of tourists would not be detrimental to
tourism sustainability. Improvements in tourism sustainability can be achieved
through a number of specific actions. Puppim de Oliveira (2003) presents four sorts of
environmental actions: building institutional capacity; establishment of protected
areas; investment in environmental projects (sanitation, water, waste management);
and control of private actions (land mostly owned by the state, control number of
tourists and new tourism investments). Strategies for managing those impacts are also
discussed in detail by WTO (1997). At the policy level, development plans, which
include tourism and which set out zones for tourist use, should determine rights of
access to areas and consider what sort of activities are suitable for the area. Economic
mechanisms such as subsidies could be used to encourage more sustainable practices
and provide income for conservation of the environment. For the development of
infrastructures, projects should use minimal impact construction techniques, native
species for landscaping and appropriate architecture styles. Infrastructure
development should also take into account recycling, waste minimization and energy
efficiency programs.

Activity-Infrastructure: Is the infrastructure sufficiently developed to support tourism


development?

Looking at the 6th dimension in the STBT chart, Indonesia and Thailand seems to be
lagging behind in terms of infrastructure readiness. In terms of hotel rooms for
20

instance, the STBT framework suggests a considerable gap between the tourism
activity and the number of tourists. These countries clearly need to improve their
supply capacity of tourism services, mostly in terms of tourism infrastructure. Based
on the STBT indicators, Malaysia seems to have adequate infrastructure to support
tourism development.

Activity-Attractiveness: Is the country sufficiently attractive to enhance tourism


development?

The weak score for attractiveness (7th dimension) in Indonesia could explain the weak
score in activity. This lack of attractiveness in Indonesia is mainly due to the lack of
safety and civil liberties in the country.

V Conclusion
The concept of sustainable tourism is still in its infancy, based on the extent to
which it has been quantified and discussed in cross-country analyses. The current
paper tried to fill this gap by providing a simple methodology to assess tourism
sustainability, based on a number of quantitative indicators. The proposed
methodological framework allows to create a comprehensive database against which
the sustainability of tourism activities in various countries can be assessed. The
methodology developed in this paper (Sustainable Tourism Benchmarking Tool -
STBT) relies on quantitative indicators that are policy-relevant and, as such, it is
hoped that it will become a useful tool for decision makers, researchers, and
businesses involved in tourism activities in developing countries.

The usefulness of the STBT methodology has been illustrated by using three case
studies: Indonesia, Malaysia and Thailand. While the STBT methodology used in this
paper may need further refinement and elaboration, the results and findings obtained
suggest that the STBT can become a valuable tool for researchers and policy makers
involved the assessment and design of sustainable tourism strategies.
This illustration show us that an equal level of tourism activity might induce different
sort of improvements and might have different consequences for the development.
Therefore, some countries need to increase the number of tourists’ arrivals when other
have to perform in the length of stay or in the receipt per tourists. The tourism activity
needs to be compared to the asset for tourism that we have divided in two groups the
spot that will attract tourists and the infrastructure to receive them.
Once we control for those aspects we can extend our analyses to the other fields relied
to tourism activity. Here, we have connected on the same analyse, the relation to the
broader economy wide impact, and we have in this relation surrounded the leakages
problem. When some countries have to increase the linkage of the tourism industry
with the rest of the economy, other countries have to try that those linkages benefit to
national sectors because of their large amount of leakages.
Finally, we rely this economic sustainability to the socio-ecological sustainability to
detect the present or future main problems that appear with tourism development in
developing country.

The main satisfaction in constructing this procedure, is that grouping many countries
in one analyze is relevant and do not delete the heterogeneity aspect, contrary to
21

Ko(2004) argument. Effectively, the heterogeneity of developing countries is useful to


detect the main problems of each country in their tourism activity. However, once the
main problems are detected, we have to implement a country specific study to
improve the tourism activity, but we needed a consistent methodology that allows
comparability of results across tourist destinations.

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CERDI, Etudes et Documents, E 2007.08

Table 1. STBT: dimensions, variables, indicators and units


Dimensions Variables Indicators Unity Measure
Asset Beach asset 
Coast Line Km (Source: CIA fact book) 
Latitude Position to equator (Source: WDI)
Natural asset
Marine environment
Deserts Squared km
Forests Squared km (Source: WDI) 
Waterfalls, Lakes, Caves
Wildlife Species Number (Source: CITES) 
National Park Squared km/ number (Source: UNESCO) 
Cultural asset
Listed sites and monuments Number (Source: UNESCO) 
Museums Number (Source: UNESCO)
Folklore festivals Number
Activity Flow
Expenditure Billion $ (Source: WTO or WDI) 
Arrivals Million (WTO or WDI) 
Value
Exp/Tourist Million $ (Source: WTO or WDI) 
Length of stay Days (Source: WTO)
Expenditure/day Million $ (Source: WTO) 
Lodging occupancy Percentage (Source: WTO) 
Linkages Tourism industry
Indirect effect Million $ per Tourism income (Source: TSA) 
Tourism economy
Indirect effect Million $ per Tourism income (Source:: TSA) 
Leakages Internal
Imports
Competing tourism imports Million $ per Tourism income (Source: TSA) 
Non competing tourism imports Million $ per Tourism income
Factors
L: Employee remuneration Million $ per Tourism income (Source:: National Accounts)
repatriations Million $ per Tourism income (Source:: National Accounts)
External K: Interest paid to the ROW from
Intermediaries loans
Percentage
Percentage
Foreign Investors Tourists using local operator
25

Foreign operator price received by Million $ per Tourism income (Source:: National Accounts)
destination Million $ per Tourism income (Source:: National Accounts)

Dividend repatriations
Repatriated profits from IDE
Sustainability Environment
Environmental Agreements Number of environment international agreement (Source: CIA factbook) 
Critical ecosystem Percentage of endangered species (Source: CITES) 
Pollution CO2 emissions, tones million per capita (Source: WDI) 
Intensity of use Tourists/hectare (Sources: author’s calculation) 
Environmental benefice Tax revenue from tourism allowed to environment protection activity (Source: TSA)
Developing control Existence of environmental review procedure over development of site

Human Pressure impact Ratio of tourism to locals (Sources: author’s calculation) 


Employment impact Employs required to Tourism output (Source: TSA) 
Quality of employment Average wages in tourism sector/ Average wage (Source: ILO)
Tax revenue from tourism Value of direct and indirect tax (Source: TSA)
Infrastructure Basic
Roads networks Km per surface (Source: WDI) 
Rails networks density Km rail per surface (Source: WDI)
Sanitation access Percentage (Source: WDI) 
Electricity Production Kwh per capita (Source: WDI) 
Water access Percentage (Source: WDI) 
ICT
Internet Hosts number per 10000 people (Source: WDI) 
Telephone mainlines Number per 1000 people (Source: WDI) 
Mobile phones Number per 1000 people (Source: WDI) 
Tourism
Restaurant Number (Source: WTO)
Lodging Beds number(Source: WTO) 
Entertainment Cinema number (Source: UNESCO)
Attractiveness Price Competitiveness
Hotel prices In US$ (Source: WTCC) 
Power Parity Purchase US$ required to purchase same amount as 1US$ in United States (Source: WTCC) 
Human Resources
Adult Literacy Rate Percentage (Source: WTCC) 
Enrolment Combined for primary, secondary and tertiary education enrolment (Source: WTCC) 
Safety
ICRG index 
Civil Liberties index 
26

Figure 2: STBT application

Vietnam Thailand Sri Lanka

Asset Asset Asset


100 100 100

Attractivness Activity Attractivness Activity Attractivness Activity

0 0 0
Infrastructure Sustainable Infrastructure Sustainable Infrastructure Sustainable

Leakages Linkages Leakages Linkages Leakages Linkages

Dominican Republic Mexico Egypt, Arab Rep,

Asset Asset Asset


100 100 100

Attractivness Activity Attractivness Activity Attractivness Activity

0 0 0
Infrastructure Sustainable Infrastructure Sustainable Infrastructure Sustainable

Leakages Linkages Leakages Linkages Leakages Linkages


27

Table 1.1: Clusters analysis by linkages groups

Linkages Leakages Asset beach natural cultural Activity flow quality International Sustain Hum Env Infra Attractive
Group 1 11 77 30 31 29 21 41 14 26 41 63 41 73 29 67
Group 2 27 51 24 31 23 14 31 7 26 31 64 41 74 39 72
Group 3 40 62 27 28 33 12 27 7 14 35 64 41 74 21 64
Group 4 75 47 28 33 28 14 21 8 14 25 52 40 58 26 55

Table 1.2: Clusters analysis by leakages groups

Leakages Linkages Asset beach natural cultural Activity flow quality International Sustain Hum Env Infra Attractive
Group 1 19 45 27 46 24 3 23 2 13 34 69 52 70 19 50
Group 2 55 38 23 29 24 14 29 7 23 30 58 35 70 31 67
Group 3 78 18 32 30 31 22 40 13 24 43 67 45 74 29 70
Group 4 96 8 38 32 34 29 44 26 25 35 60 42 67 30 57
CERDI, Etudes et Documents, E 2007.08

Table 2. STBT: disaggregated scores

Benchmarks M1 T2 I3 M1 T2 I3 M1 T2 I3
Tourism Asset 45 40 100
Beach 55 44 100
Coast 9 6 100
Latitude 95 77 89
Natural 45 40 100
Forest 50 50 68
Wild 40 25 75
Park 20 33 40
Cultural 0 8 8
Sites 0 8 8
Museums .. .. ..
Tourism activity 43 45 33
Flow 18 17 8
Number 17 14 6
Revenue 10 12 6
Quality
30 33 34 Exp/Tour/Day 20 21 21
Exp/Tour 17 24 29
Occupancy 65 62 52
Length of stay 17 27 33
International open 52 48 24
Intern/National 40 27 11
WTCC Open 62 61 32
Intern /Exports 11 18 12
Linkages 39 7 20
Tourism industry 40 13 22
Impact on GDP 40 13 22
Tourism economy 21 7 15
Impact on GDP 21 7 15
Leakages 52 72 84
Internal 52 72 84
Import in industry 46 72 79
Import in economy 44 65 74
Factor .. .. ..
External
Intermediaries .. .. ..
Foreign investors .. .. ..
Sustainability 64 69 94
Environment 73 70 90
Pressure 81 85 97
Charts 42 35 32
End Spec 79 58 62
Energy 95 81 66
CO2 per capita 69 84 94
Community 42 53 69
Pressure 25 65 92
Employ Tour. Ind. 10 16 41
Wage 20 31 35
Infrastructure 41 18 8
Basic 60 45 34
Road 4 2 3
Rail 6 4 2
Water access 90 80 75
Electricity 12 6 2
Sanitation access 95 95 46
Tourism 15 15 8
Rooms 9 11 2
Cinema 3 2 2
ICT 69 32 14
Lines 25 14 5
Mobiles 39 27 6
Internet 2 1 1
Attractiveness 66 83 46
Price Comp. 87 82 82
Hotel Price 100 95 85
PPP 74 83 82
Human 83 86 80
Adult Literacy rate 89 93 88
Enrolment 70 73 65
Safety 50 85 30
ICRG index 74 72 39
Civil Liberties 33 63 37
1
Malaysia; 2Thailand; 3Indonnesia

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